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The new Employees Provident Fund (EPF) requirement for foreign workers has officially taken effect from 1 September 2025. All Malaysian employers must now contribute 2 percent of their foreign employees’ monthly wages to EPF.
This policy is part of the government’s effort to provide equal financial security and retirement protection for all workers in Malaysia.
1. Who Is Covered
The rule applies to employers who hire foreign workers with valid employment passes, temporary work permits or professional visit passes.
The mandatory 2% employer contribution covers most sectors and employment types. However, domestic helpers and expatriates who contribute to foreign pension schemes remain exempted.
2. Employer Responsibilities
Employers must ensure that all eligible foreign workers are registered with EPF and that contributions are paid each month without delay. Payments can be made via the i-Akaun Employer portal or any authorised EPF agent.
Companies should also review their HR and payroll systems to ensure the 2% deduction is accurate and automatically processed.
3. Why This Rule Matters
The policy helps foreign employees build retirement savings during their time in Malaysia and encourages inclusive social protection for the workforce.
For employers, complying with this rule demonstrates responsibility and fairness in employment practices while avoiding penalties and maintaining smooth operations with authorities.
4. How Employers Can Stay Compliant
To ensure your company meets the requirement:
- Verify all foreign employees are registered under EPF;
- Update payroll software to include the 2% employer contribution;
- Keep records of payments for audit purposes; and
- Inform HR and finance teams about the ongoing obligation.
It’s also important to communicate clearly with foreign staff so they understand how the contribution benefits their future savings.
5. Consequences of Non-Compliance
Failure to make timely or full contributions may result in penalties under the EPF Act. Companies that ignore the rule also risk damaging their reputation as fair employers which can impact future hiring and government relations.
📌 The 2% EPF rule is a major milestone for Malaysia’s employment landscape. Employers should now focus on ensuring their systems and records are fully compliant to avoid issues down the line.
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